US Dollar Index Holds Near 99.00 Amid Escalating Geopolitical Tensions

The US Dollar Index (DXY) is holding its gains near 99.00 as geopolitical tensions escalate, with the Greenback benefiting from safe-haven support.

This comes after the expansion of US secondary sanctions against entities trading with Iran and a warning from US Treasury Secretary Scott Bessent that a major financial institution could face enforcement action this week.

Bessent clarified that Chinese entities will not be exempt from these measures, but despite the geopolitical tailwinds, further gains for the Greenback may be capped by the US Treasury's decision to double its buyback operations for longer-dated bonds.

The US Treasury could utilize up to $1 trillion from the Treasury General Account to finance these repurchases, potentially altering market liquidity and yields.